8 key concepts for profitable ASCs

There are still opportunities to run a successful, profitable ambulatory surgery center business.

At the Becker’s ASC Review 22nd Annual Meeting — The Business and Operations of ASCs event in Chicago, a panel of experts addressed profitability at ASCs. The panel included Administrative Director of St. Vincent’s Outpatient Surgery Center Lisa Nichols, RN, MSHA; Medical Director and President of Puget Sound Surgical Center Robert W. Landerholm, MD; President and CEO of Practice Partners in Healthcare Larry Taylor; and Vice President, National Accounts of Medline Roe Riggio. Susan Kizirian, principal of Kizirian Healthcare Consulting, moderated the panel.

The keys to keeping an ASC a profitable business include:

1. Increasing patient volume. Ms. Nichols was able to increase volume at her ASC 6.5 percent year-over-year for the three years she’s been at the helm. “I worked with the scheduling staff to learn what they do and spent time at the physician offices to see if they had issues scheduling their cases at our center,” she said. “I also worked with physicians to see if they could bring in any additional cases.”

2. Keep physicians happy. Volume is indicative of physician happiness; ASC administrators who meet their physicians’ needs are the most successful. “Meet the needs of the kingpins and work the other physicians around them without making those other physicians feel like they are worked around,” said Mr. Taylor. “Balance those needs to provide a concierge service to the physicians. Create a great relationship with their practices and the ASC. Figure out how to work new physicians in so the partners and new utilizers play well with each other.”

3. Collaboration between surgeons. Sometimes physician partners give up unused block time to bring in new utilizers or become more flexible with their schedules. Current ASC owners and operators may also spend time teaching new utilizers the right cases for the center. “It’s a collaborative effort and we want to pull the wagon in the same direction,” said Dr. Landerholm. “Make sure surgeons do good, safe, efficient procedures with good staff and turnover times. Anesthesia has to be on board as well. We diversified into other specialties to drive volume; volume is an ongoing concern because that’s our bottom line.”

4. Communicate with vendors about volume changes. It’s important for ASC owners and operators to discuss patient volume changes with vendors to ensure all necessary supplies are available. “If your volume will increase later in the year, you need to communicate that with your vendors,” said Mr. Riggio. “If you don’t have enough fluids in place, you have to be prepared or you’ll be paying a higher price later.”

5. Track your data for contract negotiations. ASC owners and operators can use case costing data to ensure reimbursement rates will cover costs. Pay attention to materials in high-cost implant cases as well and carve-out where necessary if possible. “Know your high and low case cost and whether you pay for implants,” said Mr. Taylor. “If you have a goose egg for uncovered services, that’s a hard contract. But once you sign the contract, your rate is locked in. Then insurance companies could merge and rates could lower when they merge.”

6. Collect patient deductibles as soon as possible. Patients have higher deductibles than in the past and ASCs that collect early are more likely to receive payment. “Price transparency is important because of the cash pay patients and patients with high deductibles. These people are shopping for their doctor and facility, and that’s where price transparency on the insurance side comes into play,” said Mr. Taylor.

7. Hire the right person for the right position. The best employees will fit into the ASC’s culture and execute their positions expertly. Ms. Nichols’ center built a foundation on staff seeing physicians as their customer. “We have multiple surgery center options within our geographic radius and we want to figure out how to make physicians want to bring cases here,” she said. “Our staff responds in a timely manner, starts cases on time, always answers the phone for the physician’s scheduler and makes sure to negotiate times with them. These are important values to impart during onboarding.”

8. Build talent from within. “You need people with great attitudes and teamwork, not someone who is tearing you apart. We like interfacing with training programs to get talent early. If you’re teaching and growing, it’s great to build talent,” said Mr. Taylor. “Some people aren’t cut out to be managers and others aren’t cut out for customer service. Additionally, get physicians involved as part of the team.”